As most of us know, scams and scammers abound on the internet, looking for the next great “opportunity” to pitch to the desperate and naive.
Scammers love to use the latest buzzwords and hot trends to wrap their ponzis and pyramids around in order to add an air of legitimacy in the eyes of their marks. Over the years, they’ve used legitimate products and services such as telecom, insurance, online shopping malls, penny auctions, internet advertising, social networks, and travel packages to bilk wannabe online entrepreneurs out of millions and millions of dollars. Without remorse, they ruin dreams, destroy families, and in the saddest cases, lead the most fragile victims to suicide.
One of the latest hot commodities the scammers are using these days is the growing interest in the world of cryptocurrency, i.e. bitcoin and the myriad of altcoins that followed it. With growing economic uncertainty, cryptocurrencies and the blockchain technology behind them are generating a lot of interest as a decentralized, unregulated financial instrument which is mostly beyond governmental manipulation and control.
Although I’m not a bitcoin/altcoin enthusiast, bitcoin and many of the other cryptocurrencies that followed in its footsteps are not scams in and of themselves. Just like guns are used in crimes, bitcoin has been used to pay for many illicit activities and has generated some negative press. That alone doesn’t make bitcoin bad. Bad people do bad things and they’ll use whatever resources they can to do so.
Unfortunately for those who are honestly trying to expand the use and viability of bitcoin and other legitimate altcoins, over the last few years scammers have taken a shine to the idea of bundling their latest pyramid and/or ponzi scams to this growing technology. And why not? The technology behind cryptocurrencies is beyond the grasp of the average internet user, but the fascinating growth in the value of bitcoin is a great hook to lure in those not wanting to miss the boat on the next great cryptocurrency success story.
Here are a few of the typical shady cryptocurrency opportunity methods:
Bundling cryptocurrency and financial “education” with so-called bonus tokens which can be used to “mine” that particular cryptocurrency or coinback offers where you get some or all of your investment back in alleged new cryptocurrency(OneCoin, Real Points, iPro Network, Excallit, et al.)
Blatant outright cryptocurrency investment/ponzi schemes.
Bitcoin pyramid/gifting programs(Bitcoin Grower, World Net Leads, 2×9 BitMax, Star Crypto Mine, Bitcoin4All Club, Instant Bitcoin Profits, et. al): These programs are generally just old school gifting/chain letter type scams with a bitcoin twist or front a digital product like internet advertising in a feeble attempt to appear legit. They only accept and pay out in bitcoin in an attempt to avoid regulatory intervention and asset seizure.
As you’ll notice, the types of schemes mentioned above are either allegedly creating new cryptocurrencies that they often proclaim will be better and more user friendly than bitcoin or they use bitcoin to take and receive payments because of its relatively anonymous nature in an effort to avoid legal repercussions.
The schemes that claim they are launching new cryptocurrencies may or may not actually be doing so. A few do actually have publicly accessible blockchains and may even have managed to get listed on legitimate exchanges. However, they are really nothing more than pump and dump altcoins which will never have any real value. Their primary objective is working as a pyramid scheme where the better promoters earn upfront commissions by selling people whatever it is the scheme has bundled with tokens or coins, be it education, advertising, or software.
In some cases, there are doubts that some of these cryptocurrencies have a real blockchain. They are completely centralized and make up their own coin values. They have zero usability and even if the opportunity has a built in exchange can rarely be sold at the value assigned, or in many cases, even for pennies on the dollar.
No matter what type of cryptocurrency opportunity has crossed your path, if it’s anything similar to the ones described in this article, it’s a good bet that you can save yourself some headaches by passing on it. Let the scammers move on to their next mark.